Digital experience vendor Akamai has announced plans to reduce its workforce by around 3%, or approximately 299 positions, as part of a cost-cutting effort. The company aims to shift resources from its shrinking content delivery business to focus on growth opportunities in cloud computing and security.
The layoffs will allow Akamai to direct more resources towards its compute and security offerings. Despite the job cuts, the company’s stock has seen an increase since the announcement. Akamai also reported a 1.3% increase in sales for the quarter ended March 31.
Akamai’s cost-cutting measures include not only reducing its workforce but also shrinking its real estate footprint and decreasing spending on third-party cloud computing technology. The company expects annual savings of $40 million and a margin improvement from the headcount reduction.
In addition to the layoffs, Akamai has been optimizing its consumption of third-party cloud technology and engineering out certain functions that were previously outsourced. The company has been expanding its cybersecurity capabilities through acquisitions, with a focus on API threat detection and response, microsegmentation, and identity and access management.
The decision to reduce its workforce was driven by the company’s goal to prioritize investments in areas with the greatest potential for future growth. Akamai’s CEO, Tom Leighton, emphasized the need to deliver greater value to shareholders and sustain profitability in a challenging economic environment.
The layoffs targeted the management layer to allow for more direct customer service and to leverage the company’s expertise in security and compute.
Despite the cost-cutting measures, Akamai reported positive sales growth and remains optimistic about its prospects in the market.
